House v Defence Force Retirement & Death Benefits Authority

3 The amount of benefit a person receives is governed by whether he or she comes within Class A, B or C, not by the person's assessed percentage of incapacity: that only provides the data for making the classification into one of these three categories. 4 Mr House was initially classified under s 30 as 10% Class C. By April 1986, the Authority had arrived at the position of classifying him as 30% Class B as from the date of his retirement. Between then and the requests for review that led to the decisions of the Tribunal now on appeal before me, Mr House was reclassified a number of times, with the reclassifications ranging from a low of 20% Class C to a high of 40% Class B. There have been many reclassification hearings by the Authority and the Tribunal and a number of hearings in this Court, including the Full Court. Sometimes Mr House has been successful, sometimes he has not. 5 The present proceedings commenced with Mr House's request, pursuant to s 34 the DFRDB Act, for review of his then current incapacity classification. This was dealt with by the Authority on 17 October 1997. By its reconsideration decision of 11 December 1998, the Authority determined that his classification should remain as 40% Class B (the classification last assigned to him in May 1995). But it then directed that Mr House's case be referred to its delegate to undertake a current review of his incapacity in relation to civil employment, including a review of the nature of his prescribed impairment(s), and to determine whether his reclassification under s 34(1) is warranted. 6 On 22 June 1999, the Committee of Alternates, as directed by the Authority by its decision of 11 December 1998, reviewed Mr House's classification and determined that it should remain as 40% Class B. He requested reconsideration of the decision of June 1999. This reconsideration decision, which confirmed the earlier decision, was given by the Authority on 13 December 1999. The Authority then resolved, after giving detailed reasons:

"(a) to determine that the relevant kinds of civil employment are driver, mobile plant operator, labourer, storeperson, mining and construction labourer and security officer;

(b) that 'alcoholism' and 'alcoholism and alcoholic liver disease' constituted Mr House's prescribed impairment; and

(c) to CONFIRM the decision made by the authorised person on 22 June 1999 under section 34 that Mr House remain classified 40% Class B."

7 This is the second decision which Mr House took to the Tribunal and which is now the subject of the present appeal. 8 The Authority, in giving both its decisions, and the Tribunal, in reviewing them, was required, pursuant to s 34 the DFRDB Act, to assess Mr House's then-existing percentage of incapacity in relation to civil employment with a view to determining whether his existing classification in accordance with s 30(1) should be altered. Section 34, so far as it is relevant, provides:

"(1) The Authority may, from time to time, if it is satisfied that the percentage of incapacity in relation to civil employment of a recipient member in receipt of invalidity pay is such that the classification of the member should be altered, reclassify him in the appropriate classification set out in section 30 according to the percentage of his incapacity in relation to civil employment.

(aa) what is the percentage of incapacity in relation to civil employment of a recipient member; or

the Authority shall have regard to the following matters only:

(a) the vocational, trade and professional skills, qualifications and experience of the recipient member;

(b) the kinds of civil employment which a person with skills, qualifications and experience referred to in paragraph (a) might reasonably undertake;

(c) the degree to which any physical or mental impairment of the recipient member, being a prescribed physical or mental impairment, has or had diminished the capacity of the recipient member to undertake the kinds of civil employment referred to in paragraph (b);

(d) such other matters (if any) as are prescribed for the purposes of this subsection.

(1B) In subsection (1A), 'prescribed physical or mental impairment', in relation to a recipient member or a deceased member who was immediately before his or her death a recipient member, means:

(a) a physical or mental impairment of the member that was the cause, or one of the causes, of the invalidity or physical or mental incapacity by reason of which the member was retired, whether or not that impairment changed, for better or worse, since that retirement; or

(b) any other physical or mental impairment of the member causally connected with a physical or mental impairment referred to in paragraph (a)."

9 As mentioned, the Authority on both occasions determined to maintain Mr House's classification at 40% Class B, while the Tribunal affirmed those decisions, save that it varied his percentage of incapacity from 40% to 30%. 10 The errors of law which Mr House says entitle him to have these decisions of the Tribunal overturned are as follows:

"(a) the Tribunal's Reasons for Decision did not properly and/or adequately include its findings on material questions of fact with sufficient reference to the evidence or other material on which those findings were based;

(b) the Tribunal breached the rules of natural justice in that:

i) it made conclusions as to whether the diagnosis of Alcoholism and Alcoholic Liver Disease was the correct diagnosis of the applicant's medical condition at the time of discharge from the Australian Army in 1975 and thereafter, when it was not required to make such conclusion and in circumstances where it did not alert the applicant to the fact that it intended to consider such an issue;

ii) it made findings as to the applicant's creditability without giving the applicant the opportunity to comment upon such issues;

(c) the Tribunal took an irrelevant consideration/s into account, namely:

i) whether the diagnosis of Alcoholism and Alcoholic Liver Disease was the correct diagnosis in the applicant's circumstances;

11 Counsel for Mr House abandoned reliance on the other grounds in the notice of appeal.

Ground (a) - Inadequate reasons 12 Counsel submitted that the Tribunal breached its duty under s 43(2B) the AAT Act to give proper reasons for its decision. 13 In Hawkins v Comcare [2001] FCA 726, von Doussa J said that the obligation imposed on the Tribunal by s 43(2B) was similar to that imposed on the Refugee Review Tribunal by s 430 the Migration Act 1958 (Cth), an obligation explained in the judgment of McHugh, Gummow and Hayne JJ in Minister for Immigration and Multicultural Affairs v Yusuf (2000) 75 ALJR 1,105 at [67] to [68]. Counsel for Mr House did not challenge the correctness of this statement, but referred to Yusuf at [69] and submitted that the Tribunal failed to comply with its obligation in that it failed to ensure that Mr House could identify the Tribunal's reasons for reaching its conclusion adverse to him and the facts it considered material to that conclusion. He contended that it merely recited or noted the evidence of Mr House and the various medical opinions, but made no attempt to evaluate any of that evidence and failed to explain how it arrived at its decision adverse to Mr House. Reference was made to authorities, including Total Marine Services Pty Ltd v Kiely (1998) 51 ALD 635, particularly at 641, where it was said:

"In this case, the Tribunal summarised at considerable length the evidence given by the employee and the reports provided by a range of medical practitioners. … However, mere recitation of the evidence, or 'noting' that certain propositions have been put, does not satisfy the requirements of s 43(2B) of the Administrative Appeals Tribunal Act."

14 The submission is rejected. 15 The Tribunal was required, in reaching its decision, to have regard only to the matters in s 34(1A)(a), (b) and (c), there being no matters prescribed for the purposes of (d) of that sub-section. By force of s 34(1A)(c) and (1B), the Tribunal had to determine, among other things, what was the impairment that was a cause of Mr House's invalidity or incapacity by reason of which he was retired from the army. It identified that, correctly, as "alcoholism and alcoholic liver disease". However, it said: "With the passage of time and the benefit of hindsight, we are left in a difficult position because we doubt that is a correct diagnosis of the applicant's medical condition at the time of discharge from the army and thereafter." But the Tribunal correctly acknowledged that, despite this doubt, it was bound to deal with the case on the basis that Mr House was retired because of "alcoholism and alcoholic liver disease". 16 Additionally, Mr House contended in the Tribunal, but not in the proceedings before the Authority, that there should be taken into account in his favour that he was also suffering post traumatic stress disorder. His contention in oral submissions to the Tribunal was that this was an impairment which the Tribunal was required by reason of s 34(1A)(c) and (1B)(b) to taken into account in his favour in its review of the Authority's reclassification exercise. The Tribunal evaluated the conflicting medical and other evidence and explained why it considered that the information provided by Mr House upon which Dr Crompton, who had diagnosed chronic post traumatic stress disorder, was too unreliable to justify that diagnosis. The Tribunal also expressly accepted the evidence of Dr Reddan to the effect that Mr House was not a post traumatic stress disorder sufferer and also referred, with obvious approval, to the other medical evidence supporting Dr Reddan's view and conflicting with Dr Crompton's diagnosis. 17 The Tribunal was also required, by s 34(1A)(c), to determine the degree to which the condition of "alcoholism and alcoholic liver disease" for which he was retired from the army diminished his capacity to undertake the kinds of civil employment "referred to in paragraph (b)" of that subsection. The Tribunal, in par 48, expressly adverted to this issue. It identified these employments by referring to the determination made by the Authority in its decision of December 1999. The Authority had given detailed consideration to identifying the various kinds of civil employment which Mr House could, given his range of skills and experience, reasonably undertake. The Authority concluded that there were six kinds of such civil employment, rejecting Mr House's claim that there were a couple of other classes of employment that he was hampered or prevented from engaging in by reason of his impairment. The Tribunal concluded: "that the respondent [Authority's] determination as to relevant kinds of employment set out in para 2 above is appropriate and reasonable in the circumstances". It added some explanatory comment. 18 In determining the degree to which his retirement impairment had diminished his capacity to undertake these six kinds of civil employment, the Tribunal evaluated and made findings on both the applicant's own evidence and the medical evidence. It made findings as to his long history of continuous employment subsequent to his discharge and it held that, though his abuse of alcohol "must have had an effect on his capacity as an employee", it was not such as to make him unemployable. It found "that the abuse is controlled so that there is no undue adverse influence on the applicant's employment performance". It referred to other aspects of his evidence, including what he said about his ability to control his drinking during the working week, and found that Mr House "is able to maintain remunerative employment while that is his inclination and [while] he controls his substance abuse for this purpose". 19 The Tribunal then turned to its consideration of the medical evidence relevant to the issue of the extent to which his alcoholism had diminished his capacity to undertake civil employment. It gave detailed consideration to that body of evidence. It expressly accepted Dr Stevenson's assessment of his having a 30% incapacity in relation to the six kinds of civil employment referred to in the Authority's decision. The derivation of this assessment was explained by Dr Stevenson in his report of 4 November 1999. Dr Stevenson expressed the opinion that, "based on Mr House's account of his alcohol intake", he was 45% incapacitated for each of the six kinds of civil employment referred to in the Authority's decision of December 1999. He also said that the 45% incapacity assessment, based as it was on Mr House's "purely subjective account" of the impact of his alcoholism on him makes it "more appropriate to move [to] an estimate based on more objective measures". Dr Stevenson's report listed three objective measures, including clinical and pathology tests showing that his liver function was then "pristine", his continuing ability to hold employment and his good neurological status as evidenced by such things as his excellent capacity to argue a complex legal case. He reported that these objective measures "would indicate that a more precise set of figures, based on objective criteria, would be" 10% for each of the six kinds of employment. His report concludes with the suggestion that "perhaps as an interim measure", the average of 27.5% between what he referred to as the assessments based on the subjective and the objective criteria rounded off to 30% overall should be adopted. He explained what he meant by doing this "as an interim measure" by recommending that Mr House be reviewed in five years or so with a view to making an assessment based on purely objective criteria. 20 After its evaluation of all the relevant evidence, the Tribunal expressed its ultimate conclusion in this way:

"The respondent [Authority] assessed incapacity at 40%. We have come to the conclusion, on the basis of the evidence of Dr Stevenson in particular and also Dr Reddan and Dr Ding that a more reasonable classification of incapacity would be 30%."

21 It was for this reason that the Tribunal varied the Authority's determination while still maintaining the applicant as Class B. 22 How the Tribunal arrived at this conclusion is adequately explained in its reasons. As can be seen, it gave informative reasons for its decision. It did much more than merely recite the medical evidence and that of Mr House.

Ground (b)(i) - Denial of natural justice 23 The Tribunal was required, by s 34(1A)(c), to identify the relevant "prescribed physical or mental impairment", ie, the impairment that was a cause of Mr House's being retired from the army. It correctly identified "alcoholism and alcoholic liver disease" as that impairment. It was not, however, required by the DFRDB Act to review the correctness of that diagnosis at the time it was made. It expressed a view on this, however, and there was much evidence before it, both from what Mr House had to say particularly about his post-retirement employment history and drinking habits and in the medical evidence that, as the Tribunal observed, cast doubt on the correctness of that 1979 diagnosis. 24 My attention was not drawn to any indication by the Tribunal to Mr House, prior to delivery of its decision, that it harboured these doubts about the correctness of that diagnosis. 25 A failure to comply with the requirements of natural justice can amount to error of law for the purposes of s 44 the AAT Act. But the only errors of law that justify overturning a Tribunal decision are those errors which have played some part in leading the Tribunal to its conclusion the subject of challenge on appeal. See Casarotto v Australian Postal Commission (1989) 86 ALR 399 at 401; Cavell v Repatriation Commission (1988) 9 AAR 534 at 539 and BTR Plc v Westinghouse Brake & Signal Company (Australia) Ltd (1992) 34 FCR 246 at 253 - 254. 26 The Tribunal explicitly and repeatedly acknowledged that it was bound to deal with the case on the basis that Mr House's "prescribed physical or mental impairment" for the purposes of s 34(1A)(c) was "alcoholism and alcoholic liver disease". See pars 42 and 46 (last sentence) of the Tribunal's reasons. There is no reason to doubt that it arrived at its determination by correctly proceeding on the basis that, in the context of determining whether to alter Mr House's classification under s 30, it had to assess the degree to which this particular prescribed impairment had diminished his capacity for relevant civilian employment. The fact that it assessed Mr House as having as significant a percentage incapacity of 30% is clear confirmation that it made a proper assessment in accordance with s 34(1A) and, in doing so, disregarded its doubts about the correctness of the 1979 diagnosis. 27 The failure by the Tribunal to drawn Mr House's attention to its concerns about the correctness of the 1979 diagnosis does not justify interfering with the Tribunal's decision. It was, at best for Mr House, an error of law that did not, in fact, affect the decision reached by the Tribunal.

Ground (b)(ii) - Denial of natural justice 28 It is apparent from the Tribunal's reasons that, in making findings particularly about the nature of Mr House's drinking habits, how they affected his capacity to work and his general employment history, the Tribunal rejected some of the evidence he gave because of the adverse view it formed about his credibility on some, but not all, of what he had to say. A number of these findings of fact were relevant to its ultimate decisions that Mr House should remain classified as Class B under s 30(1), but that the percentage of his incapacity in relation to civil employment should be reduced from 40% to 30%. 29 But contrary to the submissions made in support of this ground of appeal, Mr House can have been in no doubt throughout the hearing that his credibility was an issue for the Tribunal's consideration. The Tribunal told him as much in the most explicit terms at the outset of the hearing in response to Mr House's expressed concern that the Tribunal might be thinking he was telling lies. This occurred in the course of discussion over his request to the Tribunal to receive the reasons for decision of other Tribunal hearings in which he was involved in proceedings under the DFRDB Act. Moreover, Mr House also expressed concern, in the course of his oral evidence, as to the need to convince the Tribunal of his truthfulness in comments he made on the views expressed on earlier occasions by various medical practitioners as to his lack of credibility. In the course of his cross-examination of Dr Reddan, the presiding member of the Tribunal considered it necessary to interrupt to draw Mr House's attention to the Tribunal's concerns that, on the basis of what he had been putting in cross-examination to the medical witness: "… the Tribunal would be entitled to find that you did seek to mislead the doctor in the history that you gave her". In the ensuing discussion, the Senior Member, in effect, suggested to Mr House that he could be "manipulating the evidence". After Mr House completed his cross-examination of Dr Reddan, who gave evidence adverse to aspects of his case, the Tribunal asked some questions of the doctor; in the course of responding to the Tribunal's question whether he wished to ask any further questions of Dr Reddan arising out of the Tribunal's own questions, he made it clear that he was well aware that his credibility was very much an issue in the proceedings. 30 Mr House, who represented himself in the present proceedings (as he had in earlier reclassification applications made by him to both the Authority and the Tribunal), was alert throughout to concerns the Tribunal might have about his credibility.

Ground (c)(i) - Irrelevant considerations 31 If the Tribunal had simply found that the 1979 diagnosis of "alcoholism and alcoholic liver disease" was unjustified, then it could properly be said that it had considered matter irrelevant to its decisional task. The Tribunal, however, expressed this view in the context of undertaking what it considered, understandably, to be the difficult task of assessing just what role Mr House's abuse of alcohol played in affecting his employability after his discharge from the army. 32 But if the Tribunal dealt with its assessment of the 1979 diagnosis in a way which could be said to involve it having regard to a matter irrelevant to its considerations, that is not an error of law that in fact affected its ultimate decision adverse to Mr House. I have explained why this is so in the reasons I have given for rejecting the challenge to the decision that the Tribunal made an error of law constituted by its failure to alert Mr House to the fact that it intended to consider the correctness of the 1979 diagnosis. 33 The appeal is dismissed with costs.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.

Solicitor for the Respondent: Australian Government Solicitor